Cash flow on long term rentals?.....!

[Jarrod Buldo]

Live in Upstate South Carolina. Greenville and surrounding areas are my market.

Everywhere I look people INSIST on a 10% minimum cash on cash return.

In the current market, how is that possible? I'm just a guy. What I mean is: I dont have a rehab crew waiting, I don't have $300k for cash offers, I'm not a corporate REIT happy with $30 margin because they can scale.

I'm legitimately not complaining. But HOW are people making long term rentals work? Seems like anything sub $300k is an IMMEDIATE full ask cash offer, which I can't compete with. 

And when I look back on lost deals, see what the house sold for, there's NO WAY the numbers worked. Adding in mortgage, vacancy, maintenance alone blows the budget. And that's not including management fees.

Ive managed to grab a single rental, and ONLY because I wasnt a REIT, and didn't plan to immediately displace the tenant. Which the seller was concerned about.

With prices sky high, and investment rates sitting at 6-6.5%, WITH points, what the hell are small scale investors doing to make the numbers work?

For transparency the few deals I've seen, including the one I managed to close, had a CoC return in LOW single digits. Wouldn't see an IRR in double digits for about 3-5 years.

[John Underwood]

The last 5 houses I purchased for less than 30k each, all cash. My purchase price is some people's downpayment on their mortgage. This is in Greenville and Spartanburg. 

The pretty house on MLS for 300k is not your best money maker.